AgdaPkt 2012-01-09 - Laserfiche WebLink

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8.A. - Page 55 The Act further provides that no otller properties or entities are exempt from the Special Tax unless the properties or entities are expressly exempted in a resolution of consideration to levy a new special tax or to alter the rate or method of apportionment of an existing special tax. Parity Taxes and Special Assessments The Special Taxes and any penalties thereon will constitute liens against the Taxable Parcels in the District until they are paid. Such lien is on a parity with all special taxes and special assessments levied by other agencies and is coequal to and independent of the lien for general property taxes regardless of when they 1re imposed upon the Taxable Parcel. The Special Taxes have priority over all existing and future private liens imposed on the property. The City, however, has no control over the ability of other entities and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion of the Taxable Parcels within the District subject to the levy of Special Taxes. In addition, the landowners within the District may, without the consent or knowledge of the District, petition other public agencies to issue public indebtedness secured by special taxes or assessments, and any such special taxes or assessments may have a lien on such property on a parity with the Special Taxes. The imposition of additional indebtedness could reduce the willingness and the ability of the property owners within the District to pay the Special Taxes when due. Insufficiency of Special Taxes In order to pay debt service on the Bonds, it is necessary that the Special Taxes levied against Taxable Parcels witllin the District be paid in a timely manner (see, however, °SECUIZITY FOR THE BONDS—County Teeter Plan"). The City has established the Reserve Fund in an amount equ11 to the Reserve Requirement to pay debt service on the Bonds to the extent Special Taxes are not paid on time and other funds are not available. See "SECURITY FOR THE BONDS—Reserve Fund" and Appendix C– "Summary of the Fiscal Agent Agreement." Under the Fiscal Agent Agreement, the City has covenanted to maintain u1 the Reserve Fund an amount equ11 to the Reserve Requirement; subject, however, to the limitation that the City may not levy the Special Tax in any fiscal year at a rate in excess of the Maximum Annual Special Tax Rate permitted under the Rate and Metllod. See "SECUIZITY FOR THE BONDS—Special Taxes" and "—Summary of Rate and Method." Consequently, if 1 delinquency occurs, the City may be unable to replenish the Reserve Fund to the Reserve Requirement due to the limitation of the Maximum Annual Special Tax Rate. If such defaults were to continue in successive years, the Reserve Fund could be depleted and a default on the Bonds would occur if proceeds of a foreclosure sale did not yield a sufficient amount to pay the delinquent Special Taxes. The City has made certain covenants regarding the institution of foreclosure proceedings to sell any property with delinquent Special Taxes uz order to obtain funds to pay debt service on the Bonds. See "SECURITY FOR THE BONDS—Covenlnt for Superior Court Foreclosure." If foreclosure proceedings were ever instituted, any mortgage or deed of trust holder could, but would not be required to, advance the amount of delinquent Special Taxes to protect its security interest. Tax Delinquencies Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of principal of, and interest on, the Bonds are derived, are being billed to the Taxable Parcels within the District on the regular property tax bills seilt to owners of the parcels. Such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do regular property tax installments. Special Tax installment payments -31-